Moody's Get Invloved In The Irish Debt Crisis

The snowball is gathering speed as it rolls downhill. Please note Anglo Irish Debt Rating Cut by Moody’s

Anglo Irish Bank Corp.’s senior debt was cut to the lowest investment grade rating by Moody’s Investors Service, which said it may reduce the rating to junk unless the government guarantees bondholders against losses.

The lowest investment grade rating is one step above junk. So it's basically there already.

I also found this quote, by Adam Cole, global head of FX strategy at RBC Capital Markets: "With the prospect of more easing by the U.S. Federal Reserve priced in, the focus may move back to Europe."

Already priced in, eh? Weren't we just being told to buy everything?

Apparently all the buyers were lined up for the 2 yr US treasuries, which had a stellar auction today. This also demonstrates risk aversion. Meanwhile, CNBC was crowing about all the deals that were being done with companies that were at all-time highs. Just like private equity putting $49 billion into real estate at the highs, these M&A clowns are partying like teeenagers in dad's car.

The S&P failed at the highs and I was able to scale out of my short from last Friday that I mumbled about in last night's commentary. It was not a very well executed one by any means. But it was a good exercise in not letting emotion take over. I took some heat but was patient as well.

It looks like, from a daily perspective, that the S&P is forming a rising wedge or diagonal of some sort. I'm eyeing a flush into the 1132 area before another attempt at 1150. If we can get higher from today's close beforehand, I may attempt another short. I'm waiting for higher levels though. Better odds there.